ECOATM NETS $40 MILLION TO INSTALL MORE KIOSKS

Financing will help cellphone recycler triple its locations

San Diego-based ecoATM, a maker of cellphone recycling kiosks, said it has secured $40 million in debt financing from Falcon Investment Advisors to expand its kiosk network nationwide.

The company now has about 320 kiosks in 20 states, Mark Bowles, founder and chief marketing officer, said Thursday. It will use the debt to pay for additional kiosks covering the Lower 48 states. EcoATM is installing additional kiosks at a rate of two per day. The expansion could triple its locations across the U.S.

“The goal is to eventually be within five miles of 90 percent of the population in the U.S.,” said Bowles. “That will take a few more years. But the strategy is to get the kiosks as close to as many people as possible as fast as we can.”

EcoATM’s kiosks automate the process of recycling cellphones. The machines, mostly located in shopping malls, scan the phone, determine its value and spit out cash. The average rebate is $25, with smartphones providing a bigger payday for recyclers than older talk-and-text phones.

“We do a couple of things for the malls,” said Bowles. “We pay rent, and we create foot traffic in the mall with cash in their hands.”

EcoATM sells about 60 percent of the handsets to third-party distributors, who resell the devices in emerging markets. The company recycles the rest.

EcoATM previously raised $31.4 million in venture capital from Claremont Creek Ventures and CoinStar, the maker of Redbox DVD rental kiosks. It opted for a bridge loan this time to stem the dilution of existing shareholders as it continues on a path toward a potential initial public stock offering.

Bowles declined to reveal sales or profitability. But he did say, “we couldn’t have gotten this type of money if we weren’t showing very good metrics on the financial side.”

The company employs 150 people in San Diego. It contracts with armored car outfit Loomis, which services ATMs, to restock the kiosks and deliver the recycled cellphones. DNK Engineering in San Diego builds its machines. EcoATM’s kiosks also recycle MP3 players and tablets. They’re located in many Westfield shopping centers in San Diego.

“In 2012, we grew from 45 ecoATMs primarily in California to a network of 300 ecoATMs in 20 states,” said Chief Executive Tom Tullie. “There’s still a large percentage of the country that doesn’t have access to a convenient recycling solution for their mobile phones and other personal portable electronic devices. We raised this money to help us deploy ecoATMs nationwide and help people recycle their old phones, tablets, or MP3 players, regardless of where they live.”